The
defendant below, Mount Vernon Fire Insurance Company
("Mount Vernon"), appeals the denial of its amended
motion for entitlement to attorney's fees and costs
("amended motion for entitlement") filed pursuant
to section 768.79, Florida Statutes (2015), and Florida Rule
of Civil Procedure 1.442, which was based on the trial
court's finding that Mount Vernon's nominal proposal
for settlement to its insured, New Moon Management, Inc.,
etc. ("New Moon"), was not made in good faith.
Because we conclude that the trial court abused its
discretion by finding that Mount Vernon's proposal for
settlement was not made in good faith, see State Farm
Fla. Ins. Co. v. Laughlin-Alfonso, 118 So.3d 314, 315
(Fla. 3d DCA 2013) ("The abuse of discretion standard of
review governs this Court's review of a trial court's
determination that a proposal for settlement was not made in
good faith."), we reverse the order under review and
remand for the entry of an order granting Mount Vernon's
amended motion for entitlement.

Mount
Vernon issued a commercial property and general liability
policy to New Moon. Following heavy rains in August 2008, New
Moon filed a claim under the policy for water damage. Later
that year, after obtaining a roof damage report from a
structural engineer, Mount Vernon denied the claim based on
exclusions and limitations in the insurance policy.

In
August 2013, New Moon filed a complaint against Mount Vernon,
asserting claims for breach of the insurance contract and bad
faith. After nearly two years of extensive discovery, on July
2, 2015, Mount Vernon served a nominal proposal for
settlement ($1, 000) on New Moon pursuant to rule 1.442 and
section 768.79.

Within
a week of serving its proposal for settlement, Mount Vernon
filed a motion for final summary judgment, asserting that the
damage was not covered under the terms of the policy.
Following a hearing, the trial court granted Mount
Vernon's motion for summary judgment. Thereafter, the
trial court entered final summary judgment in favor of Mount
Vernon and denied New Moon's motion for rehearing and
motion for relief from judgment.[1]

Pursuant
to rule 1.442 and section 768.79, Mount Vernon filed its
amended motion for entitlement based on New Moon's
failure to accept Mount Vernon's proposal for settlement.
In response, New Moon argued that the nominal proposal for
settlement was not made in good faith because Mount Vernon
did not have a reasonable basis to offer the nominal amount.

At the
hearing on the amended motion for entitlement, Mount Vernon
argued that it submitted its proposal for settlement
following extensive discovery and the taking of several
depositions and, at the time it submitted its proposal for
settlement, the record reflected that there were no issues of
material fact and that Mount Vernon had a reasonable basis to
conclude that it had "no exposure, let alone nominal
exposure." The trial court reserved ruling. Thereafter,
the trial court entered an order denying Mount Vernon's
amended motion for entitlement, finding that Mount
Vernon's nominal proposal for settlement was not made in
good faith. See § 768.79(7)(a), Fla. Stat.
(2015) ("If a party is entitled to costs and fees
pursuant to the provisions of this section, the court may, in
its discretion, determine that an offer was not made in good
faith. In such case, the court may disallow an award of costs
and attorney's fees."). Mount Vernon's appeal
followed.

Mount
Vernon contends that the trial court abused its discretion by
determining that the nominal proposal for settlement was not
made in good faith. We agree.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addressing whether the trial court abused its discretion by
finding that Mount Vernon&#39;s nominal proposal for
settlement was not was made in good faith, we must consider
whether Mount Vernon "had a reasonable basis at the time
of the offer to conclude that [its] exposure was
nominal." Fox v. McCaw Cellular Commc&#39;ns of
Fla., Inc., 745 So.2d 330, 333 (Fla. 4th DCA 1998);
see also Dep&#39;t of Highway Safety & Motor
Vehicles, Fla. Highway Patrol v. Weinstein, 747 So.2d
1019, 1021 (Fla. 3d DCA 1999) (reversing the trial
court's denial of attorney's fees, which were sought
under section 768.79, where the record conclusively
demonstrates that, at the time the nominal proposal for
settlement was made, the offeror had a reasonable basis to
...

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